COMPANY REPORTS;Sears Says Its Earnings Rose By 21.8% in the First Quarter

Sears, Roebuck & Company said yesterday that first-quarter earnings from continuing operations rose 21.8 percent, benefiting from strong sales of clothing and big-ticket items during an early Easter shopping season.

Sears, the nation's second-largest retailer, said results excluded those from the Allstate Corporation insurance company and the Homart Development Company, which have since been spun off or sold.

Sears also reported increasing problems with customer credit.

Income from continuing operations rose to $151 million, or 36 cents a share, from $124 million, or 30 cents a share, in the corresponding 1995 period. Including Allstate and Homart, net income for the first quarter a year ago was $559 million, or $1.41 a share.

The results slightly exceeded earnings estimates of 35 cents a share, according to the average estimate of 19 analysts for Zacks Investment Research. Sears shares initially rose 50 cents on the New York Stock Exchange, but then retreated at late morning, ending down 50 cents at $51.75 a share.

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Sears saw strong sales and benefited from lower year-end inventories, said Arthur C. Martinez, the company's chairman and chief executive. Top sellers during the Easter holiday season were women's dresses, cosmetics, men's and children's clothing, home appliances, tires and batteries, and exercise equipment, he said.

But Sears said that because of mounting consumer credit problems, it took a $227 million charge to write off bad debt, compared with a $168 million charge in the quarter a year ago. Sears also continued to have problems with its merchandising and credit operations in Canada and Mexico.